The performance of Kelani Tyres PLC for the year ended March 31, 2011 has been hampered by the escalation of natural rubber prices, petroleum product prices and unfair competition.
"A major negative phenomenon that we experienced quite unexpectedly during the year has been the 72% escalation of natural rubber prices in the world market from $ 2.90 to $ 5, coupled with the high prices of petroleum based raw materials has created total mayhem in world tyre markets, Kelani Tyres Chairman Chanaka de Silva has told shareholders in his Annual Report for 2010/2011.
He has also said that, despite the efforts had been made to absorb these price increases in the selling prices, the company has been unable to hedge against these increases due to the inconsistent policies of competitors.
He has also pointed out that there has been unfair competition from the under-invoiced imports. He believed that the representations made to the government in this regard, would be taken seriously and that necessary action would be put into place to circumvent this serious problem, which is causing annual losses to Treasury valued at Rs 500 million.
The consolidated Kelani Tyres Group turnover for the period under review was Rs 3.9 billion, up from the Rs 2.4 billion a year ago while the Gross Profit for the period was Rs 826.8 million, up from the Rs 687.4 million, the previous year. The Group pre-tax profit had increased to Rs 361.3 million from Rs 333.9 million between the two years while the Profit After Tax had also increased to Rs 260.8 million from Rs 209.1 million.
The Kelani Tyres turnover was Rs 129 million, up from the Rs 22 million a year ago while the Gross Profit for the period was Rs 11.1 million, up from the Rs 1.9 million. Pre-tax profit had increased to Rs 91.5 million from Rs 13 million between the two years while the Net Profit had also increased to Rs 91.2 million from Rs 12.9 million.
source - www.dailynews.lk
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